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Marek’s Take: Four myths that will hinder 5G growth

Apparently many consumers think they have 5G even though they probably don't. (Getty Images)

5G networks around the globe are in their infancy. It will be at least a few more years before 5G coverage reaches beyond urban city centers and even longer before the average consumer makes the leap from 4G to 5G.

But, if you listen to the hype surrounding the technology, you are likely to think 5G is more widely available than it is. And, apparently many consumers already think they have 5G even though they probably don’t. A survey of 2,000 U.S. smartphone owners conducted in May by Decluttr, a phone refurbishment company, found that one-third of respondents thought they owned a 5G-capable device. And, of those that thought they owned a 5G device, about 62% said they had noticed improvements in their mobile services while using the 5G network.

Of course, these statistics are suspect because there are only a few 5G smartphones available today. Plus, 5G is only available in a handful of large cities and within those cities the coverage is limited to a small area.

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The wireless industry is to blame for this confusion. The top four U.S. operators have all been claiming 5G leadership on some level for months now — Verizon launched advertisements touting its 5G network superiority, and AT&T put a 5G E icon on some of its smartphones even though those phones are not 5G capable nor are they operating on 5G networks. Is it any surprise that consumers are confused about 5G?

There are many falsehoods about 5G that are being circulated but here is a list of what I believe are the four biggest myths that need to be debunked in order to reset consumer expectations for 5G.

5G will be 100x faster than 4G. 5G will be faster than 4G but it might not hit 100x 4G speeds for quite some time. Early tests of Verizon’s 5G network in Chicago found that it was hitting download speeds of 700 Mbps to 1 Gbps but the network had very limited range. Meanwhile, tests of Sprint’s 5G network found download speeds of 300 Mbps. For now, consumers should expect 5G speeds to be faster than 4G, but within reason. And, they should understand that their 5G devices will likely spend a lot of time on 4G networks when 5G is not available. Operators should do more to emphasize the capacity improvements of the 5G network. Most consumers don’t really understand what is meant when the wireless industry says 5G is lower in latency. But, they do understand the benefits of being able to download full movies in seconds rather than minutes.

5G will replace 4G. By touting their superiority in 5G, operators actually draw attention away from their 4G LTE networks. That’s not a great strategy considering they have spent the past few years upgrading their LTE networks to LTE-Advanced, and used techniques like carrier aggregation to improve the speed of the network and ease capacity constraints. Testing firm Ookla recently found that download speeds on AT&T’s LTE network had increased by nearly 50 percent in the first half of the year. Operators should emphasize that 5G is an evolutionary technology and a progression from 4G. After all, most are deploying non-standalone 5G, which will be dependent upon the underlying 4G network for quite some time. And, as former FCC Chairman Tom Wheeler points out in this 5G report which he authored that is adapted from a presentation made at the request of the Government Accountability Office, an “evolutionary rollout [of 5G] is prudent for private capital given the absence of proven new sources of revenue to justify the high cost of an all-at-once rebuild.”

Everyone needs to upgrade to a 5G smartphone right away. Yes, there will be early adopters that want the latest 5G smartphone even if 5G coverage is limited. But, for the majority of smartphone users, upgrading to a 5G smartphone doesn’t make sense. Although the Global Mobile Suppliers Association (GSA) reports that there are nine 5G smartphones available commercially around the world, in the U.S. there are only a few: The LG V50 ThinQ, Samsung’s Galaxy S10 5G, and the Motorola 5G Moto Mod that attaches to the Motorola Z4 or Z3 smartphone. And, these early 5G devices are pricey. The Moto Mod retails for about $350 and you need a Z4 of Z3 smartphone for it to work. The Samsung Galaxy S10 5G costs $1,300. Operators seem to be understandably cautious about getting customers to upgrade to 5G. Even a year ago AT&T CFO John Stephens said that he doesn’t believe that the industry will see those high upgrade rates that it experienced in the 3G and 4G eras.

5G will replace residential broadband. Wireless operators may successfully compete in the home broadband market by deploying 5G in some densely populated urban corridors, but I don’t see it getting widespread traction.
Verizon’s residential 5G broadband offering, called Verizon 5G Home, is being positioned as a competitor to cable, but so far it is only available in a few markets and Verizon hasn’t revealed any details about whether the service is resonating with consumers. T-Mobile also claims 5G could be a potential solution to bring affordable home broadband to rural areas of the U.S. where broadband services are lacking. T-Mobile’s CEO John Legere, who is trying to get his company’s acquisition of Sprint approved by the Department of Justice, said last February that the “new T-Mobile will provide affordable broadband connectivity using its 5G network to underserved customers and their communities.”
According to the 2018 FCC broadband report, about 85% of all households in the U.S. have broadband. And, household broadband usage is growing steadily just as wireless broadband usage is accelerating. Considering the existing spectrum constraints, not to mention the need for more in-building 5G coverage, I think it’s unlikely that 5G will replace residential broadband service.
As Wheeler said in his report, the real promise of 5G is in the new applications that it will enable. But, those applications are still being discovered. Let’s focus on the potential that 5G holds instead of confusing consumers with misinformation. —Sue